Supply of Homes For Sale Sets Record Increase of 15% in 4-Week Period Ending December 4th

Redfin reported on Thursday (12-8-22) that during the four-week period ending December 4, 2022, the total number of homes for sale in the US increased by 15% year-over-year. This is the largest increase since at least 2015.

The report also noted that new listings declined by more than 20% during the same period, which means that homes are sitting on the market as prospective buyers stay on the sidelines and wait for mortgage rates and home prices to decline further from their peaks. That is also evidenced by a slower housing market: The typical home that sold during the time period was on the market for 37 days, up from a record low of 17 days in June and up from 28 days from a year ago. According to Redfin, this is biggest year-over-year slowdown on record. Just 30% of homes for sale sold in two weeks, the smallest share since January 2020.

On a positive note, Redfin’s Homebuyer Demand Index is rebounding from its low point, up 5% from a week earlier, as mortgage rated continue to decline from their early November peak. Rates dropped to 6.33% from 6.50% a week earlier, which in turn is cutting the typical U.S. homebuyer’s monthly housing bill by approximately $50.

Adding additional background and his analysis, Redfin’s Deputy Chief Economist Taylor Marr said:

“This week has been relatively calm and quiet as we approach the end of one of the most volatile years in housing history. But it’s not over yet. Next Tuesday’s inflation report is the 500-pound gorilla in the room, and the Fed’s press conference the next day will bring us much more clarity on how soon and how quickly we can expect mortgage rates to come down in the new year. Since we expect only a small decline in prices next year, mortgage rates will dictate housing affordability, and as a result, demand, and sales, in 2023. If rates continue declining, more buyers may wade back into the market, as they’ll have lower monthly payments.”